What’s a Freelance Retainer Agreement?

Freelance retainer agreements can solidify steady pay and strong client relationships. Find the right fit with this guide to the pros and cons of retainers.

As a professional freelance writer, I value strategies that let me spend more time on lucrative projects and less time chasing leads. One such solution, retainer agreements, create a steady stream of income and a predictable workload while preserving freelance flexibility. 

Get answers to all your questions and explore whether this approach could work for you and your clients in this comprehensive guide to freelance retainer agreements.


What Is a Freelance Retainer Agreement?

A freelance retainer agreement establishes a scope of work for each predetermined period, usually per month, at a set pay rate. You'll receive the same amount of money each month in exchange for defined tasks or a specified number of work hours. 

Some retainer agreements repeat every period for an indeterminate amount of time, while others end after a year or another established timeframe.

By offering you a retainer, your client ensures you'll be available for the necessary work. In exchange, you get the peace of mind of a regular paycheck, without sacrificing the flexibility of freelancing. 

The Pros of Retainer Agreements

As a freelancer, you should understand the key advantages of agreeing to a retainer:

Financial Stability

Retainer agreements can increase your financial security in the freelance world. Rather than continuously seeking new clients, you can focus on your existing projects since you'll have guaranteed work and income each month. Since clients are paying for your services in advance, they're more likely to pay your invoice on time or even set up a recurring transfer. 

It's also easier to budget your money as a freelancer when you work on retainer. You know you'll make a certain amount of money from your retainer agreements each month, which you can use as baseline income to cover your monthly expenses. Extra funds above and beyond your retainers can help you build your business, pay off debt, or save for other goals. 

Strong Client Connections

You'll build an even stronger relationship with your regular clients if they're paying you on a monthly retainer. They'll get to know your services and capabilities, which could even give you the chance to branch out and offer added value (at an added cost, of course). Rather than jumping from one client to the next, you'll have a few reliable sources of long-term income. 

This arrangement allows you to create a cohesive professional network. Clients who have been happy with your service over many months and years will likely recommend you to colleagues who need similar work. Having one company on retainer often leads to other opportunities to enter lucrative ongoing agreements.

Scheduling Convenience

Once you have clients on retainer agreements, planning your daily, weekly, and monthly work schedule becomes easier. Even though unexpected projects may still pop up from time to time, you'll reduce the amount of time spent working long hours on last-minute requests. 

In fact, you'll likely notice a better work-life balance with retainer agreements in place since you'll have minimum monthly income to use for planning purposes. 

The Cons of Retainer Agreements

Consider these common cons of retainer agreements before signing on:

  • Lower rates: Usually, you'll charge clients less under a retainer in exchange for advance payments. In other words, they get a discount since they're paying you before you complete the work rather than after. 
  • Cost cutting: If the client needs to reduce expenses, your services may not make the cut if they represent a substantial monthly bill. Check in with your clients regularly to ensure they feel they're getting good value for your retainer fee. It can also be challenging to negotiate a higher rate once you enter a long-term retainer agreement. Consider building in a clause that accounts for annual raises.
  • Scope creep: Freelancers often find they're doing more than they expected under a retainer agreement. You can avoid this issue by carefully tracking your work and billing for projects and hours that exceed the agreed-upon monthly deliverables for the retainer.

It's also important to make sure you're on the same page with a prospective client before suggesting a retainer agreement. For example, you might not want to bring up this type of arrangement with a new small business owner who's trying out your services for the first time. 

On the other hand, retainers are a strong solution when you've developed a mutually beneficial relationship with your client and want to cement a long-term commitment.

How Do You Know If a Retainer Agreement Is Right for You?

Most freelance service providers can benefit from negotiating retainer agreements. This arrangement could be especially advantageous for you if:

  • You have one or more long-term clients whose regular tasks make up a significant portion of your freelance income
  • You want to create a product menu to charge clients based on the specific services they need.
  • You tend to charge by the deliverable or project rather than relying on an hourly rate. 
  • You do a lot of work for clients that doesn't fit into one-off contracts (website maintenance and updates, for example)

Retainer Agreement Alternatives

You've probably already come across the most common alternatives to retainer agreements. Pay structures you may encounter in your freelance career include:

  • Per-project rates: You bill the client separately for each project you complete. This structure is sometimes called a fixed cost payment. 
  • Per-word rates: You bill the client a fixed rate for each word you write or edit.
  • Per-hour rates: You bill the client a fixed rate for each hour of work you complete toward their deliverables.
  • Deposits: The client makes an upfront deposit for your work. You complete as many hours or deliverables as possible within that amount before the client makes another deposit to cover future projects. 
  • Net terms: Your client may request a net-30, net-60, or net-90 agreement. These clauses ask for 30, 60, or 90 days to pay the invoice after receipt. Just as you give a discount for prepaid retainer fees, you may want to charge a premium rate for clients who pay within a 90-day window. 

Many freelance service providers use a combination of one or more of these methods, whether or not they also use retainer agreements with some clients. 

The Best Way to Accept Payments as a Freelancer 

Pay.com provides an easy, affordable way to accept multiple methods of payment like credit cards and digital wallets. 

Whether you're sending a one-time invoice or requesting payment for a retainer agreement, our convenient Pay Links arrive right in your client's email or text inbox. They'll get a direct connection to a personalized checkout page where they can select from your available payment methods

We make it easy to create your Pay.com account and start accepting online payments. Whether you want a customized online checkout page for your business website or a simple, secure way to send invoices, we've got you covered with flexible, full-service payment solutions.

The Bottom Line: Should You Sign a Retainer Agreement? 

In most cases, retainer agreements with clients benefit your freelance business by providing stable work and steady income. If you do decide to sign a retainer agreement, make sure you've carefully tailored the offerings to fit your freelance business. Rather than a one-size-fits-all solution, you should have a separate retainer with distinct terms for every client. 

Pay.com provides set-and-forget-it billing for frequent clients. You can send secure invoices and they'll be able to pay with peace of mind thanks to our top-tier compliance with Payment Card Industry Data Security Standards (PCI DSS), including high-tech security measures like tokenization. 

You can even create recurring invoices for your retainer clients and track metrics like revenue over time.

Click here to get started with Pay.com now!


Can I accept credit cards as a freelancer?

Pay.com gives you the power to accept credit cards and other payment methods for your freelance work. We strive for a stress-free onboarding process so you can use our secure, flexible solutions to send client invoices shortly after signup. 

Pay.com is also affordable, with a flat rate for each transaction and a transparent Pay Dashboard where you can see every charge.

Click here to create your account now!

How much should I charge for a retainer fee?

The average amount of a retainer fee varies based on the type of work you do. One method involves charging around 10% of the value of the service. For example, if you'll write 10 marketing emails that will generate an expected $50,000 in total revenue ($5,000 each), you would charge a retainer of 10% of $50,000 or $5,000 for the work required.

How does a retainer contract work?

Most retainer agreements charge a specific weekly, monthly, or quarterly rate in exchange for a specific amount of work. For example, you could negotiate a monthly retainer of $1,000 in exchange for 10 hours of work as a marketing consultant. You can also develop a project-based retainer, with specific deliverables for each period rather than a set amount of hours

Is a retainer taxable income?

The IRS considers retainer fees taxable income. You must report the total annual retainer fees received from each client on an IRS 1099-MISC form when you file your income tax return for that year.

How often is a retainer paid?

Monthly retainers are most common in the freelance world. However, you may be able to negotiate a weekly, quarterly, or even annual retainer fee depending on the nature of your work, your financial needs, your client preferences, and other factors.

Meet the author
Andrea Miller
Andrea Miller has been a writer and editor for more than two decades. Specializing in business and finance, she has written for some of the major websites in the financial sector. Outside of work, she spends most of her time with her family and enjoys hiking, yoga, and reading.
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